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Insurance Company Universalna

Open Joint Stock Company

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Why Ukrainian Insurance Market? Only Southern and Eastern European markets demonstrate considerable Only Southern and Eastern European markets demonstrate considerable potential for growth potential for growth

Insurance is one of the Insurance is one of the most dynamically growingmost dynamically growing sectorssectors of the of the Ukrainian economy Ukrainian economy

In 2005 Gross Premiums collected from individuals increased In 2005 Gross Premiums collected from individuals increased 1.7 times1.7 times compared to the previous yearcompared to the previous year

Insurance entertains preferable taxation in Ukraine – profit from insurance Insurance entertains preferable taxation in Ukraine – profit from insurance operations is taxed at operations is taxed at 3%3% comparing to 25% profit tax for other economic comparing to 25% profit tax for other economic activities activities

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Market Overview

At this point of time it is difficult to correctly define the size of insurance At this point of time it is difficult to correctly define the size of insurance market due to a common practice of using insurance products as an instrument market due to a common practice of using insurance products as an instrument for tax optimization. for tax optimization.

The share of real insurance products still does not exceed The share of real insurance products still does not exceed 30%30% of the total of the total written premiums.written premiums.

Starting from 2005 the trend has changed and, by the end of the year, Starting from 2005 the trend has changed and, by the end of the year, the volume of real insurance has increasedthe volume of real insurance has increased

Real market is highly fragmentedReal market is highly fragmented TOP-5 companies collect more than 9% of the total premiums written TOP-5 companies collect more than 9% of the total premiums written TOP-10 – 15% of the premiums writtenTOP-10 – 15% of the premiums written

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Leaders of Real Insurance Market, 2005* Leaders of Real Insurance Market, 2005*

   INSURANCE COMPANYINSURANCE COMPANY Gross Premiums, Gross Premiums, mln. US$mln. US$

Growth rate, % Growth rate, % compared to 2004compared to 2004

11 ORANTAORANTA   67 75067 750 148,4148,4

22 Garant-auto Garant-auto 47 02747 027 162,4162,4

33 ASKAASKA 36 30036 300 94,894,8

44 INGO UkraineINGO Ukraine 33 48033 480 118,7118,7

55 Kredo-Classic Kredo-Classic 31 70031 700 136,9136,9

66 UNIVERSALNAUNIVERSALNA 29 00029 000 178,1178,1

77 ETALONETALON 25 60025 600 43,443,4

88 UPSKUPSK 24 70024 700 122,9122,9

99 PZU Ukraine PZU Ukraine 20 90020 900 154,3154,3

* Data based on “Expert Ukraine”* Data based on “Expert Ukraine”

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Market Potential

Motor InsuranceMotor InsuranceMotor TPL current penetration YoY 2005 - 20%Motor TPL current penetration YoY 2005 - 20%Expected car fleet market growth till 2010 – 11% CAGRExpected car fleet market growth till 2010 – 11% CAGRThat will increase considerably all types of Motor Insurance That will increase considerably all types of Motor Insurance

Property Insurance Property Insurance Prospected fast growth of mortgage market leads to consequent Prospected fast growth of mortgage market leads to consequent development of real property and construction risks insurance development development of real property and construction risks insurance development Personal Insurance Personal Insurance Introduction of compulsory medical insurance and development of life Introduction of compulsory medical insurance and development of life insurance allows us to expect for sharp growth insurance allows us to expect for sharp growth

Forecasted growth in the next 5 yearsForecasted growth in the next 5 years: : min.min. 300%300%

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Company Snapshot 22ndnd in terms of size of network among Ukrainian insurance in terms of size of network among Ukrainian insurance companies companies

Gross Premiums Written in 2005 – Gross Premiums Written in 2005 – US$ 29 mlnUS$ 29 mln, in the 1, in the 1stst half of half of 2006 – 2006 – US$ 14.6 mlnUS$ 14.6 mln

Strategic positioning: retail with prime focus on providing services Strategic positioning: retail with prime focus on providing services to individualsto individuals

Goal: to become Pan-Ukraine Insurance Company by expanding Goal: to become Pan-Ukraine Insurance Company by expanding retail network into all regions of the countryretail network into all regions of the country

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Key StrengthKey Strength:

Over Over 15 years15 years of presence and positive history in Ukrainian insurance of presence and positive history in Ukrainian insurance

marketmarket

Independence: the company is not a captive Independence: the company is not a captive

Transparent and clear shareholder structure Transparent and clear shareholder structure

22ndnd biggest retail biggest retail insurer in the country insurer in the country

Strong Strong re-insurancere-insurance position and high-quality portfolio protection with key position and high-quality portfolio protection with key

international playersinternational players

Experienced management team both in HQ and branchesExperienced management team both in HQ and branches

Nationally recognized and highly reputable brand-nameNationally recognized and highly reputable brand-name

The first insurer which introduced The first insurer which introduced ISO 9001ISO 9001 quality system quality system

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Key Market SegmentsKey Market Segments

Company is one of the industry leader in the following segments:Company is one of the industry leader in the following segments:

SegmentSegment Market Share Market ShareUkrainian Green Card InsuranceUkrainian Green Card Insurance

Civil Liability of Motor Vehicles OwnersCivil Liability of Motor Vehicles Owners 28% 28% in European countriesin European countries

Motor Hull Insurance Motor Hull Insurance 5% 5%

Travel Abroad Medical Insurance Travel Abroad Medical Insurance 20% 20%

Motor TPL (Third Party Liability) InsuranceMotor TPL (Third Party Liability) Insurance 5% 5%

TIR-Carnet Insurance TIR-Carnet Insurance 100%100%

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Financial HighlightsFinancial Highlights

000’ US$ 000’ US$ 2002004 4 2002005 F5 F2002006 6 Gross Premiums 19,600 29,000 32,000 Gross Premiums 19,600 29,000 32,000

EquityEquity 9,500 9,500 9,700 19,000 9,700 19,000

Insurance reserves Insurance reserves 7,900 7,900 10,800 10,800 12,000 12,000

Net profit Net profit - - 473473 11 1155 800 800

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Portfolio StructurePortfolio Structure

2005 2005 F2006 F20062005 2005 F2006 F2006

Type of InsuranceGross

Premiums, ‘000 US$

% of total portfolio

Gross Premiums, ‘000 US$

% of total portfolio

TIR Carnet system 3 077 10.6 3 100 9.7

Ukrainian Green Card 6 890 23.8 4 900 15.3

Motor TPL Insurance 3 850 13.3 4 500 14.1

Motor Hull Insurance 7 023 24.2 8 600 26.9

Property Insurance 2 291 7.9 3 000 9.3

Personal Insurance 1 623 5.6 2 800 8.8

Travel Medical Insurance

659 2.3 800 2.5

Other insurance 3 587 12.3 4 300 13.4

Total 29 000 100% 32 000 100%

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Branch Branch NetworkNetwork

4747 branches in all regions of the country branches in all regions of the country 3 regional Directorates 3 regional Directorates 11 representative office in Budapest, Hungary representative office in Budapest, Hungary

Company staff:Company staff:Total – 1610Total – 1610Agents - 856 Agents - 856

Number of average Number of average surveyors:surveyors:

- 15 employees all over - 15 employees all over the country the country

Real Estate objects:Real Estate objects:- 53 objects in all - 53 objects in all

regions of Ukraine regions of Ukraine

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Branch Branch NetworkNetworkIn su ran ce P rem iu n s s tru ctu re , 2003

B ranche s35%

R e in s u ra n ce3 0 %

H e ad O ffice35%

In su ran ce P rem iu m s S tru ctu re , 2004

H e a d O ffice5 0 %

R e ins ura nce1 7 %

B ra nche s3 3 %

In su ran ce P rem iu n s S tru ctu re , 2005

B ra nche s5 1 %

R e ins ura nce1 2 %

H e a d O ffice3 7 %

The Ratio of Head Office Premiums / Branches The Ratio of Head Office Premiums / Branches Premiums Ratio best demonstrates fast Premiums Ratio best demonstrates fast development of branch network. It is adevelopment of branch network. It is aperfect reflection of retail strategy and a stable perfect reflection of retail strategy and a stable growth trend that Universalna entertains. growth trend that Universalna entertains.

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Effectiveness of ManagementEffectiveness of Management The effectiveness of the management of the company is indicated byThe effectiveness of the management of the company is indicated byone of the highest in the country Premiums/Employee Ratio.one of the highest in the country Premiums/Employee Ratio.Premiums per employee (in USD) Premiums per employee (in USD)

Total number of staffed employees:Total number of staffed employees:2003 – 467 persons2003 – 467 persons2004 – 609 persons2004 – 609 persons2005 – 698 persons2005 – 698 persons 2004 2005 Growth, %2004 2005 Growth, % P/E company total 19 980 38 138 92 P/E company total 19 980 38 138 92 P/E branches 9 654 21 029 118P/E branches 9 654 21 029 118

0

5

10

15

20

25

30

35

40

Premiums per one

employee branch

Premiums per one

employee total

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Client RelationClient Relation

The company has built a strong relationship with its clients.The company has built a strong relationship with its clients.It ensures high level of loyalty and trust among our clients asIt ensures high level of loyalty and trust among our clients aswell as business partners. well as business partners.

It is achieved, It is achieved, inter alia, inter alia, by high level of claims settled and paid. by high level of claims settled and paid. Optimized Portfolio Structure and developed techniques of risk Optimized Portfolio Structure and developed techniques of risk management results in higher than industry average but lower management results in higher than industry average but lower

thanthanTOP-10 average Ratio of Gross Premiums / Claims Settled. TOP-10 average Ratio of Gross Premiums / Claims Settled. 2003 2004 20052003 2004 2005

IC Universalna IC Universalna 22% 22% 31% 33% 31% 33% Average market 12% 19% 29.5% Average market 12% 19% 29.5% Average TOP-10 24% 34% 35%Average TOP-10 24% 34% 35%

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Life Insurance Company Life Insurance Company

Universalna possess 100% stake of the subsidiary life insurance Universalna possess 100% stake of the subsidiary life insurance company company

Life Insurance company operates under the same brand name Life Insurance company operates under the same brand name Universalna – LifeUniversalna – Life

Gross Premiums Written in 2005 – Gross Premiums Written in 2005 – US$ 535 600 US$ 535 600

Total number of insured persons by Universalna Life – Total number of insured persons by Universalna Life – 14 52814 528 ( (7.27 7.27 %% of the total number of insured nationwide) of the total number of insured nationwide)

Total number of life insurance contracts – Total number of life insurance contracts – 9 8189 818 ( (14.13%14.13% of the total of the total concluded contracts nationwide)concluded contracts nationwide)

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Life Insurance Market Life Insurance Market (2005) (2005)

Name of Life InsurerGross Premiums, ‘000

US$Insurance indemnity,

‘000 USDNo. of Insured

PersonsNo. of Insurance

Contracts

1 Grave Ukraine 8 832 79 22 451 8 342

2 Alico AIG Life 8 569 119 19 378 8 726

3 GARANT - Life 5 449 42 16 664 1 499

4 ASKA – Life 4 074 61 23 004 358

5 TAS 4 056 108 17 997 2 389

6 Blue Police 3 913 34 9 733 1 418

7 Etalon Life 2 100 152 54 578 34 385

8 Lemma Vita 1 880 12 9 889 918

9 PZU Life 947 65 2 079 479

10 Ohrana Life 536 93 3 972 20

13 Universalna Life 536 21 14 528 9 818

Universalna in percentage to total market

1% 2.4% 7.27% 14.13%

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StrategicStrategic Goals of the company, 2006 – 2008Goals of the company, 2006 – 2008

Overall Goal: to be in Overall Goal: to be in TOP- 5 TOP- 5 insurance companies in Ukraine insurance companies in Ukraine

Branch network position strengthening: the overall goal is for branches to have Branch network position strengthening: the overall goal is for branches to have at least at least 75%75% share in Gross Premiums of the company share in Gross Premiums of the company

Direct agency distribution network development Direct agency distribution network development

Active development of Active development of life insurancelife insurance company as a subsidiary company as a subsidiary Strong protection of the portfolio by re-insurance programs Strong protection of the portfolio by re-insurance programs

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Unique Investment Opportunities in Financial IndustryUnique Investment Opportunities in Financial Industry One of the dominant players on a highly underdeveloped insurance market One of the dominant players on a highly underdeveloped insurance market with a huge potential for future development within next couple of years with a huge potential for future development within next couple of years

Retail-driven business with a direct access to fastest growing segment of Retail-driven business with a direct access to fastest growing segment of Ukrainian economyUkrainian economy

Strong and experienced management team, positive experience of cooperation Strong and experienced management team, positive experience of cooperation with foreign partners with foreign partners

Nationwide branch network with the offices in all the regions of Ukraine Nationwide branch network with the offices in all the regions of Ukraine

Nationally recognized and highly reputable brand-nameNationally recognized and highly reputable brand-name

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Thanks for Thanks for your attention…your attention…

OJSC “Insurance Company Universalna”OJSC “Insurance Company Universalna”Tel/Fax: + 380 44 281 61 55Tel/Fax: + 380 44 281 61 55

www.universalna.comwww.universalna.com